Hello again and welcome to the Weekly Wrap.

On Wednesday this week we went public with the news that SMATS Traffic Solutions, the industry leader in smart mobility and traffic management solutions, has chosen Wejo’s solution to ensure their traffic data is reliable, highly accurate and targeted. Aside from the fact that this is yet more recognition of both the scale and quality of Wejo’s dataset, more importantly for us is that SMATS share a likeminded approach to using data responsibly, ethically, and for the betterment of the world around us. These are key elements we look for when partnering with any customer and we’re delighted to have a customer of SMATS’ calibre.

Interesting news this week from Hyundai who have announced that they will launch a subscription service for their electrified models that should cover all motoring costs. Subscription models are not a new thing in the automotive industry and there are no conclusive figures on their popularity yet, but flexible contracts of three to 24 months, the ability to change car every six months, and a one-month notice period, sounds like a definite appeal to the younger generation who are accustomed to subscriptions for everything. With the attractive, retro-inspired yet futuristic, IONIQ 5 being available on the scheme, I can see this subscription model being a hit and genuinely making an impact on the more common PCP and HP models.

One of the downsides of any scheme that essentially ‘rents’ out vehicles is the inevitable reduction in care as human nature dictates that people don’t look after objects they rent as much as objects they own – if you’ve ever rented a car you’ll be aware of this. Therefore, keeping a close eye on how the fleet is driven and what kind of journeys ‘subscriber drivers’ make can give real insight into how to make a scheme work for certain purposes. Using the power of connected vehicle data, Wejo’s usage-based insurance expertise can help support dynamic pricing models, support drivers during breakdown or failure, and provide smarter crash reconstruction to attribute liability more accurately.

Other manufacturers have already found that models allowing drivers to change car every month are both expensive to run and quickly lose appeal as whilst people are happy to rent, they still feel the need to ‘own’ aspects of their life and environments they spend time in which is hard to do when the environment constantly changes. Time will tell how Hyundai’s model fares, and I’ll be fascinated to see the impact it makes on ‘sales’ of electrified vehicles.

Away from the bright lights of new vehicles comes news that Cazoo, one of the UK’s largest tech unicorns specializing in the sale and delivery of used cars and set to be listed on the New York Stock Exchange via a SPAC named Ajax I, has turned its first profit. Started in just 2018 and valued at $7 billion, it could perhaps be said that Cazoo benefitted from the recent lockdowns as their online and delivery model didn’t depend on physical dealerships, but years of loss making has finally been ended spurred on by a decision to start charging for deliveries. How the reopening will impact their business model remains to be seen - will buyers flock back to dealerships again, or is a 14-day return policy a sufficient replacement?  

One thing is for sure, the UK’s tech industry certainly seems to be performing!

SPACs, particularly those in the automotive and tech industries, are starting to catch the eye of investors globally but it’s clear that many are either sceptical or unsure about exactly what one is and why they are an attractive alternative to IPOs. If that is you, I highly recommend the DAILY DRIVE PODCAST episode from July 15th, 2021, where Jason Stein and Marco Marinucci discussed exactly that topic and why the HELLA Ventures team have invested in two already this year.

That’s all for this week, but you’ll find more information and all the links to the topics I’ve mentioned in the section below.

Have a great weekend.

Richard

SMATS Traffic Solutions Deal

Another great announcement this week sees Wejo acquire SMATS Traffic Solutions as a customer for our connected vehicle data. As leaders in their field, being recognized as the partner of choice for SMATS speaks to the standard of the product Wejo has developed. Important to us, however, is that our data is used in the right way for the right reasons, which is why we’re delighted to be working with SMATS. Read the full announcement here.

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Hyundai’s Electrifying Subscription Model

Many have tried, so far only a few have succeeded, but subscription models for car ‘purchases’ look like they’re here to stay. Hyundai have combined their new subscription service with the caveat that it’s only available on their electrified range but with a monthly payment to include all costs including insurance and enticing new cars like the IONIQ 5 on the way, you wouldn’t bet against them making a success of it. Read Autocar’s take on it here.

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CAZOO Turns a Profit

Within just three years Cazoo’s online-based used car sales and delivery platform has attracted a valuation of $7 billion dollars which will see the company shun a UK IPO in favour of listing on the US stock market via a SPAC. The valuation has attracted a lot of attention but the company turning its first profit may help to silence doubters. The digitalisation of traditional industries is well underway and the company bases its forecasts for growth on the statistics that just 2% of European used car sales are online today. Read the Evening Standard story here.

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DAILY DRIVE PODCAST – Why Hella’s Investment Arm Embraces Blank-Cheque Firms

With SPACs currently all the rage in the automotive investment space, many traditional investors are starting to express an interest in how they work. To explain why HELLA Ventures has invested into two such vehicles this year, Marco Marinucci joined Jason Stein on the DAILY DRIVE PODCAST last month. You can check out the full podcast via the link here.